U.S. Senate Takes Up Farm Bill

Dairy cows feed on a farm in Chilton, Wis., in May. The farm bill being considered by Congress contains a number of provisions affecting dairies.

Senator Patrick Leahy has
been actively involved in the drafting of this year's farm bill and he says the
proposal marks a major change in dairy policy.

First, it's a voluntary
program and the primary goal is to stabilize prices. Leahy says it's very hard
for farmers to do any long term planning when milk prices fluctuate too much. "You can't have a dairy
farmer say 'okay, gee everything is going great this month', and then all of sudden
they have ten months of near bankruptcy. You've got to stop this rollercoaster," Leahy says.

Under the bill, dairy
farmers would able to purchase an insurance policy that would supplement their
income when milk prices drop below the cost of production. Vermont Agriculture Secretary Chuck Ross
thinks the approach will help most dairy farmers in the state. "They have the ability to
then buy more insurance for more milk and they can protect themselves and their
exposure to a down market," Ross says.

There's a second key part to
the bill - one that helps control the overall supply of milk. Ross says it
will lower milk prices for farmers, for amounts beyond their base production
levels, when there's too much milk on the market. "That will incent them to
produce less milk if we were in significant over supply for a period of time
and that will by reducing supply using the basic economics of supply and demand
with a steady demand you will see the price go up as the supply comes down," Ross says.

Amanda St. Pierre operates
two dairy farms in Franklin County with a total of 2,000 cows. She's also a member of
"Dairy Farmers Working Together." She generally supports the new approach. "So it changes your way of
thinking like you buy fire insurance so this should be no different from fire
insurance you may or may not need it but it's a way of thinking," says St. Pierre. "I think what's really stressing Vermont farmers is cash flow and so that $60,000 say that
could be in cash flow that now isn't because we're buying another
insurance."

The new plan also allows
farmers to choose their level of price insurance protection. St. Pierre says it means that farmers will have to decide how
much stabilization they need and how much they can afford. "You have to try and figure out where the margins are
going to be and that's a risk you know so once every five years you may use it
but you may have spent all this money," St. Pierre says. "It's a whole philosophy change so it's
hard for us to change like that."

The proposed Farm bill also
cuts spending for the food stamp program but Senator Leahy says he's hopeful
that an effort to restore those cuts will be successful. It's one of more than
80 amendments that the Senate will consider to the bill this week.